{"id":196705,"date":"2008-04-01T16:34:00","date_gmt":"2008-04-01T21:34:00","guid":{"rendered":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/04\/01\/the-role-of-hedge-funds-in-economic-collapse\/"},"modified":"2008-04-01T16:34:00","modified_gmt":"2008-04-01T21:34:00","slug":"the-role-of-hedge-funds-in-economic-collapse","status":"publish","type":"post","link":"https:\/\/www.panix.com\/~msaroff\/40years\/2008\/04\/01\/the-role-of-hedge-funds-in-economic-collapse\/","title":{"rendered":"The Role of Hedge Funds in Economic Collapse"},"content":{"rendered":"

Paul Krugman blogs today and wonders if, “Iceland the victim of a financial conspiracy<\/a>. Really, seriously.<\/p>\n

There are reports that hedge funds are trying to break the bank of Iceland<\/a> for a few bucks.<\/p>\n

As Krugman notes:<\/p>\n

Such things really do happen. During the 1997-1998 financial crisis there was, almost certainly, a financial conspiracy against Hong Kong. According to the Hong Kong Monetary Authority, several major hedge funds engaged in a \u201cdouble play\u201d, shorting both the city-state\u2019s stock market and its currency. The alleged plan was to put the HKMA in a double bind: it would be forced either to raise interest rates to defend the Hong Kong dollar \u2014 driving stocks down \u2014 or to devalue the currency. Either way the hedge funds thought they\u2019d make a killing. They were, however, caught in a bear trap when the HKMA did the unexpected and bought up a large fraction of the HK stock market.”<\/p><\/blockquote>\n

According to Krugman, who is in a position to know, Bear Stearns figures prominently in what is going on in Iceland.<\/p>\n

I would not be surprised if Bear were also involved in the 1997-8 machinations too. They have always had a rep as being the most brutal of the large investment banks.<\/p>\n

This is yet another case for greater regulation of the financial markets.<\/p>\n

A tax on currency transactions might be a bad idea either. Even a tax of less than 1\/10% would eliminate much of the currency speculation that leaves a path of poverty and destruction around the world.<\/p>\n","protected":false},"excerpt":{"rendered":"

Paul Krugman blogs today and wonders if, “Iceland the victim of a financial conspiracy. Really, seriously. There are reports that hedge funds are trying to break the bank of Iceland for a few bucks. As Krugman notes: Such things really do happen. During the 1997-1998 financial crisis there was, almost certainly, a financial conspiracy against …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[970,1080,973],"tags":[],"class_list":["post-196705","post","type-post","status-publish","format-standard","hentry","category-corruption","category-currency","category-economy"],"_links":{"self":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/196705"}],"collection":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/comments?post=196705"}],"version-history":[{"count":0,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/posts\/196705\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/media?parent=196705"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/categories?post=196705"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.panix.com\/~msaroff\/40years\/wp-json\/wp\/v2\/tags?post=196705"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}